More than 20,000 high street jobs lost

More than 20,000 high street jobs have disappeared in the past year as the downturn in consumer spending sees desperate retailers cut posts, reduce part-time workers hours and in extreme cases close stores.

The retail sector had 23,000 fewer workers in September than the same month a year ago, according to grim figures published today by industry body the British Retail Consortium (BRC). The steep drop contributed to a 0.8% fall – the equivalent of 5,780 full time retail jobs – for the third quarter as expansion by the big supermarket chains picked up some of the slack.

"With consumer spending now in recession and retail sales volumes declining, this is the biggest drop in overall retail employment in the two years since we began this survey," said BRC director Stephen Robertson.

The gloomy picture was matched by a separate report that predicts 27,000 City jobs will be lost this year, a cull that would turn the clock back more than 10 years. The number of "City-type" jobs will finish the year at around 288,000 says the Centre for Economics and Business Research (Cebr), a head count that would be on a par with 1998 and well below the peak of 354,000 seen 2007 which was the high water mark for the UK's once vaunted financial services sector. Rob Harbron, an economist at Cebr, blamed "tighter financial regulation" and the turmoil caused by the sovereign debt crisis in the eurozone for the trend.
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Mass public sector redundancies and a collapse of business confidence have pushed Britishunemployment to its highest for 17 years with the last set of official figures putting the total out of work at 2.57 million in the three months to August and unemployment among the under-25s at a record 991,000. The resultant downturn in consumer spending has put the retail sector in the frontline with home improvement chain Focus DIY, department store chain TJ Hughes and fashion brands Alexon and Jane Norman among the well-known names that have fallen into administration.

Retailers of big ticket items such as furniture and home furnishings have been hardest hit as rising food and fuel bills force Britons to cut back on spending on all but the essentials. On Tuesday Carpetright issued the latest in a string of profit warnings as homeowners continued to delay expensive home makeovers or shop only when big discounts are offered.

With inflation at a three-year high of 5.2%, the average family had £60 less to spend last month than it did a year ago, according to this week's Asda Income Tracker. "For 18 consecutive months we've seen a decline in family spending power," said Andy Clarke, Asda chief executive, who said there was growing evidence of a north-south divide.

Faced with falling sales the bosses of struggling solvent chains are trying to keep a lid on rising costs by cutting jobs or the hours worked by part-time employees.

Some chains such as Mothercare and Thorntons have announced plans to scale back their high street presence with one retail analyst suggesting British chains were closing shops at a rate of 20 a day this year. The austere trading environment means that fewer retailers than last year are looking to hire extra staff in run up to Christmas. Last week struggling catalogue chain Argos, which was reporting a 94% drop in first half profits, said it planned to offer the extra hours to existing staff who had lost out during the year. "Uncertainty and fears about Christmas trading may also be leading retailers to delay taking on this year's seasonal staff," added Robertson.